Happy New Year! Welcome to 2019 and the beginning of the 2018 tax filing season. While I would love to start this blog post off with a warm and fuzzy auld lang syne type 2018 reminiscence, I feel like the smart thing to do is to hit the ground running and talk about the looming tax deadline. There is so much going on at the government level that you need someone out there helping to prepare you for the 2019 tax season. So, let’s get this party started, shall we?
First things first, as I write this, the government is still shut down. I hear that by January 3, 2019, the incoming Congress has plans to begin resolving that however, I’m a bit skeptical about all things government these days so, I’m not holding my breath. I certainly hope it gets resolved quickly since I know people are really beginning to suffer because of it. We are now at eleven days and counting. Just note that if the government remains shut down, only about half of the IRS employees will be funded to work and no refunds will be paid out. How about that for a fine how do you do?
For More In Depth Information
If you want to more personal finance tips and strategies, including 5 Student Loan Debt Payment Tips, enter your information and click on "Learn More!"
Check your email for FREE gift details!
The next fun bit of news I have for you is that many Americans will end up owing money this year because they did not adjust their withholdings in 2018. This problem could affect more than 30 million people, according to estimates from different news articles I’ve been reading. While your tax rate may have gone down, your withholdings probably did, too. Meaning your employer withheld less from your pay, based on the government’s calculations. If that’s the case, and you didn’t increase your withholdings, you could end up having to pay. Oh, and don’t forget the loss of quite a few deductions that used to help reduce your taxable income.
Another issue with this year’s tax season is the complexity of the 2017 tax legislation that the IRS still hasn’t completely figured out. This means a couple of things. First, the IRS doesn’t know how the new legislation will work with the tax code so, they are still issuing regulations and rules. This means they are behind on all kinds of things like tax brackets and threshold changes. It also means that the IRS will need more resources than normal to implement the changes and serve the consumers. This is a problem because the IRS is already grossly undermanned (not to mention the government is currently shut down reducing the number of IRS employees to half).
To counter this problem, the IRS is leaning on accountants to help get things sorted out. That means accountants are having to work harder to get returns prepared and filed. This could be bad news for you if you wait too long to file your taxes. Accountants can only do so much work and may max out on the number of returns they can handle. So, I would either get to your accountant/tax preparer as soon as possible or extend and file your return in October.
Finally, the tax legislation has mistakes. Just like all the mammoth legislation that gets shoved through Congress in a hurry. This could be a problem for years to come if the senatorial votes aren’t there to fix it (see The Affordable Care Act). It remains to be seen just how much those mistakes can change your tax bill.
Overall, the 2019 tax season is shaping up to be a little sketchy. Any number of things could go wrong with the filing process, especially since the IRS hasn’t been able to update their antiquated computer system. Asking it to zig, when it was set up to zag, could result in a bit of a disaster. My advice is to keep excellent records, be patient and don’t rely on your tax return as part of your income!
See you later, alligator!
Joy Alford-Brand
The Dollar Lama
P.S. Make sure you check out my online courses, books and resources, too! Investing in your money management education is an investment in yourself. That’s the best investment you’ll ever make, I guarantee it! Don’t forget my weekly Facebook live videos on Facebook.com/newcashview, Instagram @joyalfordbrand and on my YouTube channel NCVTV. You can catch me twice, on Mondays between 3:00 p.m. and 4:00 p.m. for my Monday Money Management Minute and Thursday evenings between 7:00 and 9:00 (Eastern Standard time), for my weekly NCVTV episode. They are packed full of useful and entertaining money management information! If you’ve missed any NCVTV episodes, you can see the latest on newcashview.com or you can check out my YouTube channel and get caught up! You can get there by clicking here. Remember, like and share the NCVTV videos on Facebook and all your social media platforms, so others can benefit from them, too!
GET INSTANT ACCESS
Download your FREE gift!
To learn 5 Student Loan Debt Payment Tips, enter your info and click on download.
Check your email for FREE gift download!